India’s leading information technology companies, including major players such as TCS and Infosys, delivered record shareholder returns in FY26, even as artificial intelligence-led disruption and slower profit growth weighed on the broader sector. Collectively, 16 top IT services firms distributed around ₹1.3 trillion to shareholders through dividends and share buybacks during the financial year.
The payout marks one of the strongest capital return cycles for the industry in recent years, reflecting sustained cash generation even in a challenging global demand environment.
Record Shareholder Returns Across IT Sector
The total shareholder payout of ₹1.3 trillion in FY26 represents a sharp increase of about 36.3% compared to ₹95,400 crore in FY25. This surge came despite slower earnings momentum and increasing uncertainty in traditional IT service models due to rapid adoption of AI-based automation tools.
While revenue growth remained stable, profit expansion showed signs of moderation. The combined net profit of the 16 companies increased only 3.5% year-on-year, marking the slowest pace in eight years. Meanwhile, net sales grew 7.6%, improving slightly from 5.1% growth recorded in the previous year.
Buybacks Drive Major Portion of Payouts
A large part of the record distribution was driven by aggressive share buyback programmes by leading firms. Infosys completed a buyback worth ₹18,000 crore in November, while Wipro announced a ₹15,000 crore buyback scheduled for execution later in the year. Several mid-tier IT companies, including Cyient, also initiated significant repurchase programmes to return excess capital to shareholders.
Dividend payouts, however, saw only marginal growth. Equity dividends across the sector rose just 0.7% to ₹96,102 crore in FY26, indicating that buybacks played a more dominant role in boosting overall shareholder returns.
TCS Maintains Strong Dividend Leadership
Tata Consultancy Services continued to remain the largest dividend-paying IT firm in India, although its payout declined by 12.7% to ₹38,820 crore during FY26. The company has been channeling more resources toward strategic investments in areas such as artificial intelligence and data centre expansion.
Notably, TCS did not undertake any share buyback activity in the past two years, distinguishing its capital allocation strategy from peers focusing more heavily on repurchases.
Rising Payout Ratio and Market Pressure
The overall payout ratio for the sector surged to a record 102.2% of net profits in FY26, compared to 77.7% in FY25. This indicates that companies distributed more to shareholders than their reported annual profits in aggregate, supported by strong cash reserves accumulated over previous years.
Despite the high payout, the sector faced significant market pressure. Combined market capitalisation of the 16 IT firms declined by 25.3% during FY26, falling to approximately ₹24 trillion by March 2026. This marked the weakest annual performance for the sector in over a decade.
Industry Outlook Amid AI Transition
The IT sector continues to navigate a period of transition as artificial intelligence reshapes service delivery models, pricing structures, and client demand patterns. While revenue stability has largely been maintained, valuation pressures and slower profit growth reflect ongoing uncertainty in the medium-term outlook.
At the same time, strong cash flows have enabled companies to maintain robust shareholder return programmes, reinforcing the sector’s position as a consistent capital-returning segment in the Indian equity market.
Summary
India’s top 16 IT companies returned a record ₹1.3 trillion to shareholders in FY26 through dividends and buybacks, driven mainly by large-scale repurchase programmes from firms like Infosys and Wipro. Despite modest profit growth and declining market capitalisation due to AI-led disruptions, the sector maintained strong cash distribution capacity, with payout ratios crossing 100% for the first time in recent years.
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